2020 Environmental Real Estate Issues

The D.C. Circuit Court of Appeals reviewed a decision of the Federal Energy Regulatory Commission (FERC) that a solar facility that generated electricity met the statutory definition of “small.” Federal law forces public utilities to buy the power from “small” solar facilities.

Definition of “Small”
The statute says that power production capacity of no more than 80 megawatts (MW) is “small.” This facility can produce up to 160 MW of direct current (DC) power. It then uses inverters to convert the power to alternating current (AC), because the electric grid can only take AC power. The facility cannot send more than 80 MW to the inverters. During the day, it sends 80 MW to the inverters and the rest to a battery. At night, it sends power from the battery to the inverters.

The facility argued the determination of “small” should be based on how much AC power the facility can deliver to the grid. FERC agreed; some of the utilities that might be forced to buy the power appealed.

Deference to FERC when Statute is Ambiguous
FERC argued that the statute was ambiguous as to the meaning of “small.” FERC interpreted the statute to mean “small” as measured by what could be sent to the grid. The D.C. Circuit upheld FERC’s decision because the doctrine of Chevron deference says courts should defer to the agency’s interpretation if the underlying statute is ambiguous.

Chevron Maximalism
One judge dissented, accusing the two judges in the majority of “Chevron maximalism.” The dissent said that when the express text provides no immediate answer, the Court must use other statutory interpretation tools, such as “cross references, context, precedents, dictionaries, or cannons of construction.” The dissent said, “maximalists make a beeline to agency deference” and forgo proper statutory construction. FERC’s interpretation was wrong under proper construction, according to the dissent.

To see the majority and dissenting opinions https://www.cadc.uscourts.gov/internet/opinions.nsf/8B5F05D6EC9CBEF38525895600546F39/$file/21-1126-1985837.pdf